 |
We help you manage your investments. We believe very strongly that investing is the mechanism to move your purchasing power to the times when you need it.
This perspective helps you focus on the key investment questions:
- How can you get the most spending power later while giving up the least spending power now? [High return]
- How can you be most certain the spending power you plan for will be there? [Low risk]
Unfortunately, seeking more purchasing power later requires taking more risk - it's the well-known risk-return tradeoff at work. Once you decide how much spending power to seek, it turns out that the answers to the key questions are very simple:
- Keep your costs down to keep more spending power
- Diversify your investments to manage the inherent risks
So, for Sensible Financial, managing investments means simply:
- Helping you decide how much future spending power to seek by providing a clear statement of the risk-return trade-off.
- Recommending diversified, low cost investments to accomplish your spending power objective at the lowest possible risk [we recommend index mutual funds almost exclusively]
- Doing the work to put the investment program into place: opening accounts, transferring assets, purchasing investments
- Reporting to you on the performance of your investments
- Recommending investment purchases and sales to restore your portfolio to your desired risk level and target return (rebalancing)
|
|
|
|
|
|
|
You may have heard that higher risk investments yield higher returns. This is true, but only on average.
If you are more comfortable with lower risk, you should expect lower returns and must save more throughout your lifetime to make up for the slower asset growth. Chances are greater, however, that your asset growth and retirement living standard will be relatively close to what you expect.
If you can tolerate more risk, you can expect higher returns, and less savings will be required (or you may hope to retire earlier). It is less likely, however, that your asset growth will follow closely the trajectory you anticipate. Some years will produce much higher returns than you expect while other years will produce much lower returns or even significant losses. And, it is more likely that you will be disappointed, needing to work longer in order to assure the retirement living standard you desire.
|
|
| |
|
|
|
|
|
|
